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The Double Taxation Agreement (DTA)
Link BFM (Federal Ministry of Finance)
| Effective date: | |
| Findings: | Federal Law Gazette 1968 Part II p. 589 Federal Tax Gazette 1968 Part I p. 1046 Federal Law Gazette 1968 Part II p. 1104 Federal Tax Gazette 1968 Part I p. 18 |
Types of income
The double taxation agreement (DTA) between Germany and Thailand covers a variety of types of income in order to avoid double taxation. Here are the main types of income covered by the agreement:
- Income from employment (Art. 15): Income from employment, such as salaries, wages and similar remuneration.
- Business profits (Art. 7): Profits from commercial or entrepreneurial activities.
- Dividends (Art. 10): Distributions of dividends by companies.
- Interest (Art. 11): Income from receivables of all kinds, in particular interest.
- Royalties (Art. 12): Payments for the use of copyrights, patents, trademarks, designs, models, plans, secret formulas or processes.
- Income from immovable property (Art. 6): Income from the use, lease or sale of immovable property.
- Income from self-employment (Art. 14): Income from self-employed persons, including freelance activities.
- Income from shipping and aviation (Art. 8): Profits from the operation of ships or aircraft in international traffic.
- Income from public service (Art. 19): Salaries, wages and similar remuneration paid by a Contracting State or one of its local authorities.
- Pensions and similar allowances (Art. 18): Payments from pensions and retirement benefits.
- Income from public service (Art. 19): Salaries, wages and similar remuneration paid by a Contracting State or one of its local authorities.
- Pensions and similar remuneration (Art. 18): Payments from pensions and retirement benefits.
- Capital gains (Art. 13): Gains from the sale of property, such as real estate, shares in companies and other investments.
- Students and trainees (Art. 20): Provisions for income of students and trainees staying in one of the contracting states for study purposes.
This list is not exhaustive and the agreement contains detailed provisions on the types of income mentioned as well as specific regulations for the allocation and taxation of this income in the two contracting states. It is advisable to consult the full agreement or seek advice from a tax advisor to understand the precise implications for individual types of income.
Details
Article 18 (Pensions)
| (1) Pensions and other remuneration for past employment and pensions received by a resident of a Contracting State may be taxed in the other Contracting State only if such remuneration is deducted as an expense in determining the profits of an enterprise of that other State or of a permanent establishment situated in that State. |
| In Germany, tax is only paid on company pensions that are deducted as expenses by the paying company when calculating its profits. Early retirement payments are generally made by the company and are therefore taxable in Germany. If the pension is paid from a pension fund, for example, Germany has no right of taxation. Private pension provision is taxed in Germany as it also contains state subsidies Contrary to most newer DTAs, pensions in this agreement are not taxable in the country of origin (i.e. Germany). Since this agreement came into force, Thailand has been able to tax the income. However, the taxation of pensions and annuities was previously tax-free in Thailand if they were not disposed of in the same year. The income therefore only had to be imported into Thailand one year later |
| (2) Notwithstanding the provisions of paragraph 1, pensions and other remuneration for past employment and pensions paid by a Contracting State, one of its Länder or one of its regional or local authorities directly or out of a special fund established by that State, Land or local authority shall be exempt from tax in the other Contracting State. |
| Pensions and retirement salaries (civil servants) shall be taxed in Germany. |
| (3) Paragraph 2 shall apply mutatis mutandis to pensions, annuities and other recurring or non-recurring allowances paid to an individual by a Contracting State, one of its countries or one of its regional or local authorities as compensation for damage suffered as a result of acts of war or political persecution. |
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If income is taxed in Germany, it must still be declared on the Thai tax return. But there will only be a difference in tax due if the Thai tax is higher than the German tax.
en/tax/dba.txt · Last modified: 2024/06/24 07:28 by bullar
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